A fiber modulator/sensor has been fabricated by depositing a lithium niobate sol-gel thin film between the core and cladding of a fiber preform. The preform is then drawn into 125 micron fiber. The proposed design of lithium niobate cylinder fibers can enhance the existing methodology for detecting sound waves under water utilizing the acoustooptic properties of lithium niobate. Upon application of a stress or strain, light propagating inside the core, according to the principle of total internal reflection, escapes, into the cladding because of the photoelastic boundary layer of lithium niobate. Test results of the lithium niobate fiber reveal a reduction in the 1550 nm, 4mW source with applied tension. The source power from an ordinary quartz fiber under the same stress condition remained invariant to applied tension.